Indonesia Considering the Creation of a Sovereign Fund Focused on AI

As foreign investors anticipate the release of Indonesia's first national roadmap on Artificial Intelligence (AI), Indonesian authorities in charge of the country’s AI development have released a new proposal aimed at financing Southeast Asia’s largest economy transformation into a regional hub for technology growth and a notable contender in the global AI and chip-making race: a sovereign AI fund. The 179-page white paper outlines that the sovereign AI fund will be managed by Danantara Indonesia, the country’s $900B+ sovereign wealth fund. The sovereign AI fund is expected to start in 2027 and end in 2029, and afterwards use a public-private model to provide capital. Concurrently, Indonesia is exploring AI-related policies to increase its AI computational readiness. Domestic technology giant GoTo, in cooperation with Chinese firm Huawei, contributed to the report.

In a report published by Boston Consulting Group in April, the consulting firm highlighted ASEAN’s prime position for significant AI-driven gains, and stated that Indonesia had the potential for the most impact regarding absolute gross domestic output growth. But to get there, Indonesian government, as expressed in the AI Roadmap needs to continue building on its efforts to address concerns such as a lack of talent, low research funding, and uneven connectivity outside of big cities.

Indonesia’s push to become a regional AI and chip hub offers strategic opportunities for U.S. firms, both as a growth market and a potential nearshoring alternative. The public-private model backed by Indonesia’s sovereign wealth fund highlights the country’s long-term digital ambitions. For U.S. businesses, engaging now means influencing emerging standards, accessing new talent pools, and staying competitive in a rapidly evolving Southeast Asian AI landscape.